SAC May Face Civil Charges in Insider Trading Probe

SAC Capital, the hedge fund embroiled in an insider-trading investigation, is facing possible civil charges from federal regulators, according to someone briefed on a conference call with investors Wednesday.

SAC told investors it received a Wells notice from the Securities and Exchange Commission last week indicating that the regulator's staff was recommending filing civil charges against the SAC Capital Advisors, the firm's parent company.

The possible charges are in connection with the insider-trading allegations made last week against a former trader, Mathew Martoma, and the SAC subsidiary he worked for, CR Intrinsic.

In the same call, managers said that while they are confident that the firm's selloff of two pharmaceutical positions several years ago was appropriate, they are nonetheless revisiting their compliance protocols to see if further improvements might be needed, according to someone who was briefed on the discussion.

SEC Sends Wells Notice to SAC

CNBC's Kate Kelly has the update on the government's ongoing investigation of SAC.

Such charges would not materially increase SAC's financial exposure in the ongoing legal investigation, the hedge fund's president, Tom Conheeney, added. The SEC had no immediate comment on the potential new charges. (Read More: Investor: I'm Pulling Out of SAC as Insider Probe Widens)

SAC has been under fire since Nov. 20, when the Department of Justice and the SEC filed parallel complaints alleging that Martoma, who worked for the hedge fund between 2006 and 2010, used illegally-obtained information to sell positions he had amassed in two pharmaceutical companies, Elan and Wyeth, in 2008. Those sales, which were allegedly prompted by warnings from an insider that a drug trial the companies were conducting hadn't gone well, resulted in $276 million in profits, according to the complaint.

The government suits also contend that SAC founder Steve Cohen personally authorized the stock trades after being briefed by Martoma. A lawyer for Martoma, who appeared in a Manhattan court Monday, has said his client will be fully exonerated.

Toward the beginning of the Wednesday-morning call, Cohen told investors that he and the firm "take these matters very seriously," said the person who was briefed on the discussion, but that he was "confident that I acted appropriately." He then turned the call over to Conheeney. (Read More: Cohen to Present on SAC Call, Take No Questions)

Conheeney elaborated on the firm's view of the recent government allegations, but took no questions from listeners, said the person briefed on the matter. The SAC president described the firm's management as being "deeply disturbed" by the charges, this person added, and said that if accurate as described, Martoma's conduct was "unacceptable" and does not reflect "our culture of compliance." The firm has the ability to pay whatever legal charges are incurred, this person says Conheeney added, and those fees will be covered by Cohen himself, not investors. (Read More: Former SAC Fund Manger Has Been Set at $5 Million)

In the wake of the new government cases against Martoma and his subsidiary unit, some investors have grown leery of sticking with SAC, and one money manager filed a redemption request for early next year last week, someone familiar with the matter has said. This week, other individual investors have said they may want to follow suit, according to brokers.

During the morning call, Conheeney told investors SAC hoped that when the facts emerged they would still "feel comfortable" with the hedge-fund company, but added that SAC would "understand" if that were not the case, said the person briefed on the call. Beyond that, said another person familiar with the details of the call, there was no talk of redemptions.